Alberta relying on bogus labour shortage figures

AFL says government is wrong and Chartered Accountants are right: labour shortage fears are overblown

EDMONTON-The Alberta Federation of Labour released internal government documents today, showing claims of a catastrophic "labour shortage" are based on a bizarre calculation not used anywhere else in Canada, and never used previously in Alberta.

Calculations using more conventional and widely accepted methods show that there will be more workers than jobs in Alberta for the foreseeable future.

"Albertans have been told by government and business that the sky is falling and that desperate measures are necessary," say Alberta Federation of Labour president Gil McGowan. "But the truth is that someone has been playing games with the numbers: the labour market situation in Alberta is not nearly as dire as we've been led to believe."

The AFL obtained Government of Alberta documents showing the often-cited shortage of "114,000 workers by 2021" is based on a complicated calculation that uses obscure methods not seen since 1957.

Rather than a straightforward labour supply and demand calculation – used in other provinces and in Alberta until 2009 - Alberta now employs a "growth in demand/growth in supply" projection model. This model appears to be designed to yield a desired conclusion - an imminent and catastrophic shortage of workers.

The AFL has re-calculated the government's projections using more traditional methods. These calculations show that supply will outpace demand for the entire forecast period up to 2021.

These findings are in line with a report released yesterday by Certified General Accountants Association of Canada. The CGAAC report argues that while shortages of skilled labour do exist across Canada, they are sporadic and tend to be short-lived.

McGowan has written to Human Services Minister Dave Hancock advising him about the Accountant's report and asking his department to return to the more traditional method for calculating labour demand – and if not, asking him to explain why not.

His letter reads, in part: "Labour market projections are used to make important public policy decisions that have profound implications for working people and the economy. We cannot afford to get these calculations wrong because bad analysis leads to bad policy. And this isn't just a hypothetical problem. Inaccurate and misleading projections on labour shortages have already led to bad public policy such as the unjustified expansion the Temporary Foreign Worker Program, the unnecessary changes that were made by the federal government to the age of eligibility for CPP and the punitive changes that were recently made to the EI system."

McGowan calls the claims of a catastrophic labour shortage "economics gobbledeegook intended to mislead the public about the actual state of the labour market."

"There is no question there are tight labour markets for some select trades," says McGowan. "But a somewhat tight labour market for select occupations or skills doesn't translate into an economy-wide shortage."

"Select skills shortages can be solved by government and industry investments in training and apprenticeship," continues McGowan. "The provincial government should also be working with the federal government to more effectively connect unemployed people in other provinces with jobs in Alberta. For example, we should be talking about things like making relocation allowance part of the EI program."

"Why did Alberta change the way it calculates a labour shortage?" asks McGowan. "It's likely the result of pressure from employers who have discovered that the notion of a massive labour shortage can be used as an effective political tool to win policies that drive down wages, such as expanding the Temporary Foreign Worker program."

"Working closely with the Harper government, low-wage lobbyists like the Canadian Federation of Independent Business and non-union construction groups like the Merit Contractors Association have been pressuring the government to use creative math to manufacture a crisis. This crisis is then being used to win policies that shortchange hardworking Canadians out of wages that keep up with the cost of living," adds McGowan.

"Any claim of a massive labour shortage must be taken with enough grains of salt to fill an oil sands-sized dump truck."